[House Report 109-101]
[From the U.S. Government Publishing Office]



109th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    109-101
======================================================================


 
          INTELLIGENCE AUTHORIZATION ACT FOR FISCAL YEAR 2006

                                _______
                                

  June 2, 2005.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

  Mr. Hoekstra, from the Permanent Select Committee on Intelligence, 
                        submitted the following

                              R E P O R T

                             together with

                            ADDITIONAL VIEWS

                        [To accompany H.R. 2475]

      [Including cost estimate of the Congressional Budget Office]

  The Permanent Select Committee on Intelligence, to whom was 
referred the bill (H.R. 2475) to authorize appropriations for 
fiscal year 2006 for intelligence and intelligence-related 
activities of the United States Government, the Community 
Management Account, and the Central Intelligence Agency 
Retirement and Disability System, and for other purposes, 
having considered the same, report favorably thereon with an 
amendment and recommend that the bill as amended do pass.

                                CONTENTS

                                                                   Page
Purpose..........................................................     6
Classified Annex and Committee Intent............................     6
Scope of Committee Review........................................     7
Committee Statement and Views....................................     8
Committee Consideration and Rollcall Votes.......................    23
Section-by-Section Analysis and Explanation of Amendment.........    24
Title I--Intelligence Activities:
    Section 101--Authorization of Appropriations.................    24
    Section 102--Classified Schedule of Authorizations...........    24
    Section 103--Personnel Ceiling Adjustments...................    24
    Section 104-Intelligence Community Management Account........    25
Title II--Central Intelligence Agency Retirement and Disability 
  System:
    Section 201--Authorization of Appropriations.................    25
Title III--General Provisions:
    Section 301--Increase in Employee Compensation and Benefits 
      Authorized by Law..........................................    25
    Section 302--Restriction on Conduct of Intelligence 
      Activities.................................................    25
    Section 303--Authority of the Director of National 
      Intelligence to assign individuals to U.S. missions in 
      foreign countries to coordinate and direct intelligence and 
      intelligence-related activities conducted in that country..    25
    Section 304--Clarification of delegation of transfer or 
      reprogramming authority....................................    25
    Section 305--Approval of personnel transfer for new national 
      intelligence center........................................    25
    Section 306--Additional Duties for the Director of Science 
      and Technology.............................................    26
    Section 307--Comprehensive inventory of special access 
      programs...................................................    26
    Section 308--Sense of Congress on budget execution authority 
      procedures.................................................    26
    Section 309--Sense of Congress with respect to multi-level 
      security clearances........................................    26
Title IV--Central Intelligence Agency:
    Section 401--Clarification of role of the Director of Central 
      Intelligence Agency as head of human intelligence 
      collection.................................................    26
Oversight Findings and Recommendations...........................    26
General Performance Goals and Objectives.........................    27
Constitutional Authority Statement...............................    27
Unfunded Mandate Statement.......................................    27
Budget Authority and Congressional Budget Office Cost Estimate...    27
Changes to Existing Law..........................................    28
Additional Views.................................................    32
  The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

  (a) Short Title.--This Act may be cited as the ``Intelligence 
Authorization Act for Fiscal Year 2006''.
  (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.

                    TITLE I--INTELLIGENCE ACTIVITIES

Sec. 101. Authorization of appropriations.
Sec. 102. Classified Schedule of Authorizations.
Sec. 103. Personnel ceiling adjustments.
Sec. 104. Intelligence Community Management Account.

 TITLE II--CENTRAL INTELLIGENCE AGENCY RETIREMENT AND DISABILITY SYSTEM

Sec. 201. Authorization of appropriations.

                     TITLE III--GENERAL PROVISIONS

Sec. 301. Increase in employee compensation and benefits authorized by 
law.
Sec. 302. Restriction on conduct of intelligence activities.
Sec. 303. Authority of the Director of National Intelligence to assign 
individuals to United States missions in foreign countries to 
coordinate and direct intelligence and intelligence-related activities 
conducted in that country.
Sec. 304. Clarification of delegation of transfer or reprogramming 
authority.
Sec. 305. Approval of personnel transfer for new national intelligence 
centers.
Sec. 306. Additional duties for the Director of Science and Technology.
Sec. 307. Comprehensive inventory of special access programs.
Sec. 308. Sense of Congress on budget execution authority procedures.
Sec. 309. Sense of Congress with respect to multi-level security 
clearances.

                 TITLE IV--CENTRAL INTELLIGENCE AGENCY

Sec. 401. Clarification of role of the Director of Central Intelligence 
Agency as head of human intelligence collection.

                    TITLE I--INTELLIGENCE ACTIVITIES

SEC. 101. AUTHORIZATION OF APPROPRIATIONS.

  Funds are hereby authorized to be appropriated for fiscal year 2006 
for the conduct of the intelligence and intelligence-related activities 
of the following elements of the United States Government:
          (1) The Office of the Director of National Intelligence.
          (2) The Central Intelligence Agency.
          (3) The Department of Defense.
          (4) The Defense Intelligence Agency.
          (5) The National Security Agency.
          (6) The Department of the Army, the Department of the Navy, 
        and the Department of the Air Force.
          (7) The Department of State.
          (8) The Department of the Treasury.
          (9) The Department of Energy.
          (10) The Department of Justice.
          (11) The Federal Bureau of Investigation.
          (12) The National Reconnaissance Office.
          (13) The National Geospatial-Intelligence Agency.
          (14) The Coast Guard.
          (15) The Department of Homeland Security.

SEC. 102. CLASSIFIED SCHEDULE OF AUTHORIZATIONS.

  (a) Specifications of Amounts and Personnel Ceilings.--The amounts 
authorized to be appropriated under section 101, and the authorized 
personnel ceilings as of September 30, 2006, for the conduct of the 
intelligence and intelligence-related activities of the elements listed 
in such section, are those specified in the classified Schedule of 
Authorizations prepared to accompany the bill H.R. 2475 of the One 
Hundred Ninth Congress.
  (b) Availability of Classified Schedule of Authorizations.--The 
Schedule of Authorizations shall be made available to the Committees on 
Appropriations of the Senate and House of Representatives and to the 
President. The President shall provide for suitable distribution of the 
Schedule, or of appropriate portions of the Schedule, within the 
executive branch.

SEC. 103. PERSONNEL CEILING ADJUSTMENTS.

  (a) Authority for Adjustments.--With the approval of the Director of 
the Office of Management and Budget, the Director of National 
Intelligence may authorize employment of civilian personnel in excess 
of the number authorized for fiscal year 2006 under section 102 when 
the Director of National Intelligence determines that such action is 
necessary to the performance of important intelligence functions.
  (b) Notice to Intelligence Committees.--The Director of National 
Intelligence shall notify promptly the Select Committee on Intelligence 
of the Senate and the Permanent Select Committee on Intelligence of the 
House of Representatives whenever the Director exercises the authority 
granted by this section.

SEC. 104. INTELLIGENCE COMMUNITY MANAGEMENT ACCOUNT.

  (a) Authorization of Appropriations.--There is authorized to be 
appropriated for the Intelligence Community Management Account of the 
Director of National Intelligence for fiscal year 2006 the sum of 
$446,144,000. Within such amount, funds identified in the classified 
Schedule of Authorizations referred to in section 102(a) for advanced 
research and development shall remain available until September 30, 
2007.
  (b) Authorized Personnel Levels.--The elements within the 
Intelligence Community Management Account of the Director of National 
Intelligence are authorized 817 full-time personnel as of September 30, 
2006. Personnel serving in such elements may be permanent employees of 
the Intelligence Community Management Account or personnel detailed 
from other elements of the United States Government.
  (c) Classified Authorizations.--
          (1) Authorization of appropriations.--In addition to amounts 
        authorized to be appropriated for the Intelligence Community 
        Management Account by subsection (a), there are also authorized 
        to be appropriated for the Intelligence Community Management 
        Account for fiscal year 2006 such additional amounts as are 
        specified in the classified Schedule of Authorizations referred 
        to in section 102(a). Such additional amounts for advanced 
        research and development shall remain available until September 
        30, 2007.
          (2) Authorization of personnel.--In addition to the personnel 
        authorized by subsection (b) for elements of the Intelligence 
        Community Management Account as of September 30, 2006, there 
        are also authorized such additional personnel for such elements 
        as of that date as are specified in the classified Schedule of 
        Authorizations.
  (d) Reimbursement.--Except as provided in section 113 of the National 
Security Act of 1947 (50 U.S.C. 404h), during fiscal year 2006 any 
officer or employee of the United States or a member of the Armed 
Forces who is detailed to the staff of the Intelligence Community 
Management Account from another element of the United States Government 
shall be detailed on a reimbursable basis, except that any such 
officer, employee, or member may be detailed on a nonreimbursable basis 
for a period of less than one year for the performance of temporary 
functions as required by the Director of National Intelligence.

 TITLE II--CENTRAL INTELLIGENCE AGENCY RETIREMENT AND DISABILITY SYSTEM

SEC. 201. AUTHORIZATION OF APPROPRIATIONS.

  There is authorized to be appropriated for the Central Intelligence 
Agency Retirement and Disability Fund for fiscal year 2006 the sum of 
$244,600,000.

                     TITLE III--GENERAL PROVISIONS

SEC. 301. INCREASE IN EMPLOYEE COMPENSATION AND BENEFITS AUTHORIZED BY 
                    LAW.

  Appropriations authorized by this Act for salary, pay, retirement, 
and other benefits for Federal employees may be increased by such 
additional or supplemental amounts as may be necessary for increases in 
such compensation or benefits authorized by law.

SEC. 302. RESTRICTION ON CONDUCT OF INTELLIGENCE ACTIVITIES.

  The authorization of appropriations by this Act shall not be deemed 
to constitute authority for the conduct of any intelligence activity 
which is not otherwise authorized by the Constitution or the laws of 
the United States.

SEC. 303. AUTHORITY OF THE DIRECTOR OF NATIONAL INTELLIGENCE TO ASSIGN 
                    INDIVIDUALS TO UNITED STATES MISSIONS IN FOREIGN 
                    COUNTRIES TO COORDINATE AND DIRECT INTELLIGENCE AND 
                    INTELLIGENCE-RELATED ACTIVITIES CONDUCTED IN THAT 
                    COUNTRY.

  Subsection (k) of section 102A of the National Security Act of 1947 
(50 U.S.C. 403-4a), as added by section 1011(a) of the National 
Security Intelligence Reform Act of 2004 (title I of Public Law 108-
458; 118 Stat. 3643), is amended--
          (1) by striking ``Under'' and inserting ``(1) Under''; and
          (2) by adding at the end the following new paragraph:
  ``(2)(A) The Director may assign an individual to be a representative 
of the Director at a United States mission in a foreign country. Any 
such individual shall oversee and manage all intelligence and 
intelligence-related activities conducted in that country by personnel 
of any element of the intelligence community.
  ``(B)(i) Subparagraph (A) shall not be construed to supersede the 
authority of the Director of the Central Intelligence Agency described 
in clause (ii), such authority being subject to general oversight by 
the Director of National Intelligence under paragraph (1).
  ``(ii) The authority referred to in clause (i) is the authority under 
section 104A(f) to coordinate relationships between elements of the 
intelligence community and the intelligence or security services of 
foreign governments or international organizations generally and the 
authority under section 104A(d)(3) to provide overall direction for and 
coordination of the collection of human intelligence outside the United 
States.''.

SEC. 304. CLARIFICATION OF DELEGATION OF TRANSFER OR REPROGRAMMING 
                    AUTHORITY.

  Paragraph (5)(B) of section 102A(d) of the National Security Act of 
1947 (50 U.S.C. 403-1(d)), as added by section 1011(a) of the National 
Security Intelligence Reform Act of 2004 (title I of Public Law 108-
458; 118 Stat. 3643), is amended by striking ``or agency involved'' in 
the second sentence and inserting ``involved or the Director of the 
Central Intelligence Agency (in the case of the Central Intelligence 
Agency)''.

SEC. 305. APPROVAL OF PERSONNEL TRANSFER FOR NEW NATIONAL INTELLIGENCE 
                    CENTERS.

  Section 102A(e)(1) of the National Security Act of 1947 (50 U.S.C. 
403-1(e)(1)), as added by section 1011(a) of the National Security 
Intelligence Reform Act of 2004 (title I of Public Law 108-458; 118 
Stat. 3643), is amended--
          (1) in subparagraph (B), by striking ``shall promptly provide 
        notice'' and all that follows through ``paragraph to--'' and 
        inserting ``may not transfer personnel under subparagraph (A) 
        unless the Director has provided notice of any transfer of 
        personnel to be made pursuant to this paragraph and received a 
        response from--''; and
          (2) by striking subparagraph (C) and inserting the following:
  ``(C) The Director shall include in any notice under subparagraph 
(B)--
          ``(i) an explanation of the nature of the transfer and how it 
        satisfies the requirements of this subsection;
          ``(ii) the number of personnel transferred; and
          ``(iii) the individual skills and capabilities of the 
        personnel involved.''.

SEC. 306. ADDITIONAL DUTIES FOR THE DIRECTOR OF SCIENCE AND TECHNOLOGY.

  (a) Coordination and Prioritization of Research Conducted by Elements 
of the Intelligence Community.--Subsection (d) of section 103E of the 
National Security Act of 1947 (50 U.S.C. 403-3e), as added by section 
1011(a) of the National Security Intelligence Reform Act of 2004 (title 
I of Public Law 108-458; 118 Stat. 3643), is amended--
          (1) by inserting ``and prioritize'' after ``coordinate'' in 
        paragraph (3)(A); and
          (2) by adding at the end the following new paragraph:
  ``(4) In carrying out paragraph (3)(A), the Committee shall identify 
basic, advanced, and applied research programs to be carried out by 
elements of the intelligence community.''.
  (b) Development of Technology Goals.--Section 103E of such Act (50 
U.S.C. 403-3e), as so added, is amended--
          (1) in subsection (c)--
                  (A) by striking ``and'' at the end of paragraph (4);
                  (B) by redesignating paragraph (5) as paragraph (6); 
                and
                  (C) by inserting after paragraph (4) the following 
                new paragraph:
          ``(5) assist the Director in establishing goals for the 
        elements of the intelligence community to meet the technology 
        needs of the community; and''; and
          (2) by adding at the end the following new subsection:
  ``(e) Goals for Technology Needs of the Intelligence Community.--In 
carrying out subsection (c)(5), the Director of Science and Technology 
shall--
          ``(1) perform systematic identification and assessment of the 
        most significant intelligence challenges that require technical 
        solutions; and
          ``(2) examine options to enhance the responsiveness of 
        research and design programs to meet the requirements of the 
        intelligence community for timely support.''.
  (c) Report.--Not later than June 30, 2006, the Director of National 
Intelligence shall submit to Congress a report containing a strategy 
for the development and use of technology in the intelligence community 
through 2021. Such report may be submitted in classified form and shall 
include--
          (1) an assessment of the highest priority intelligence gaps 
        across the intelligence community that may be resolved by the 
        use of technology;
          (2) goals for advanced research and development and a 
        strategy to achieve such goals;
          (3) an explanation of how each advanced research and 
        development project funded under the National Intelligence 
        Program addresses an identified intelligence gap;
          (4) a list of all current and projected research and 
        development projects by research type (basic, advanced, or 
        applied) with estimated funding levels, estimated initiation 
        dates, and estimated completion dates; and
          (5) a plan to incorporate technology from research and 
        development projects into National Intelligence Program 
        acquisition programs.

SEC. 307. COMPREHENSIVE INVENTORY OF SPECIAL ACCESS PROGRAMS.

  Not later than January 15, 2006, the Director of National 
Intelligence shall submit to the congressional intelligence committees 
(as defined in section 3(7) of the National Security Act of 1947 (50 
U.S.C. 401a(7))) a classified report providing a comprehensive 
inventory of all special access programs under the National 
Intelligence Program (as defined in section 3(6) of the National 
Security Act of 1947 (50 U.S.C. 401a(6))).

SEC. 308. SENSE OF CONGRESS ON BUDGET EXECUTION AUTHORITY PROCEDURES.

  It is the sense of Congress that the Director of National 
Intelligence should expeditiously establish the necessary budgetary 
processes and procedures with the heads of the departments containing 
agencies or organizations within the intelligence community, and the 
heads of such agencies and organizations, in order to--
          (1) implement the budget execution authorities provided 
        under, and submit the reports to Congress required by, 
        subsection (c) of section 102A of the National Security Act of 
        1947 (50 U.S.C. 403-1), as amended by section 1011(a) of the 
        National Security Intelligence Reform Act of 2004 (title I of 
        Public Law 108-458; 118 Stat. 3643); and
          (2) carry out the duties and authorities of the Director of 
        National Intelligence with respect to the transfer and 
        reprogramming of funds under the National Intelligence Program 
        under subsection (d) of such section, as so amended.

SEC. 309. SENSE OF CONGRESS WITH RESPECT TO MULTI-LEVEL SECURITY 
                    CLEARANCES.

  It is the sense of Congress that the Director of National 
Intelligence should promptly establish and oversee the implementation 
of a multi-level security clearance system across the intelligence 
community to leverage the cultural and linguistic skills of subject 
matter experts and individuals proficient in foreign languages critical 
to national security.

                 TITLE IV--CENTRAL INTELLIGENCE AGENCY

SEC. 401. CLARIFICATION OF ROLE OF THE DIRECTOR OF CENTRAL INTELLIGENCE 
                    AGENCY AS HEAD OF HUMAN INTELLIGENCE COLLECTION.

  (a) In General.--Subsection (d)(3) of section 104A of the National 
Security Act of 1947 (50 U.S.C. 403-4a), as added by section 1011(a) of 
the National Security Intelligence Reform Act of 2004 (title I of 
Public Law 108-458; 118 Stat. 3643), is amended by striking ``provide 
overall direction'' and all that follows through ``elements of the 
intelligence community'' and inserting ``subject to subsection (h), 
provide overall direction for and coordination of the collection of 
human intelligence outside the United States by any department, agency, 
or element of the United States Government''.
  (b) Clarification of Roles of DNI and DCIA With Respect to Human 
Intelligence Collection.--Such section is further amended by adding at 
the end the following new subsection:
  ``(h) Clarification of Roles of DNI and DCIA With Respect to Human 
Intelligence Collection.--(1) In carrying out subsection (d)(3), the 
Director of the Central Intelligence Agency shall develop a process for 
the coordination of the collection of human intelligence outside of the 
United States. Such process shall be subject to the approval of the 
Director of National Intelligence.
  ``(2) The Director of National Intelligence shall determine which 
human intelligence collection activities shall be subject to the 
process developed under paragraph (1).''.

                                Purpose

    The purpose of H.R. 2475 is to authorize the intelligence 
and intelligence-related activities of the United States 
Government for Fiscal Year 2006 in order to enhance the 
national security of the United States, to support and assist 
the armed forces of the United States, and to support the 
President in the execution of the foreign policy of the United 
States. The bill also clarifies certain authorities of the 
Director of National Intelligence and the Director of the 
Central Intelligence Agency.

                 Classified Annex and Committee Intent

    The classified annex to this report includes the classified 
Schedule of Authorizations and its associated explanatory 
language. The Committee views the classified annex as an 
integral part of this legislation. The classified annex 
contains a thorough discussion of the issues considered by the 
Committee underlying the funding authorizations found in the 
classified Schedule of Authorizations. The Committee intends 
that all intelligence programs discussed in the classified 
annex to this report be conducted in accordance with the 
guidance and limitations set forth as associated language 
therein. The classified Schedule of Authorizations is 
incorporated directly into this legislation by virtue of 
section 102 of the bill. The classified annex is available for 
review by all Members of the House of Representatives, subject 
to the requirements of clause 13 of rule XXIII of the Rules of 
the House of Representatives, and rule 14 of the Rules of 
Procedure for the House Permanent Select Committee on 
Intelligence.

                       Scope of Committee Review

    The bill authorizes U.S. intelligence and intelligence-
related activities under the jurisdiction of the Committee, 
including the National Intelligence Program (NIP), the Tactical 
Intelligence and Related Activities (TIARA), and the Joint 
Military Intelligence Program (JMIP).
    The NIP consists of all activities of the Office of the 
Director of National Intelligence, as well as those national 
foreign intelligence, intelligence-related, and/or 
counterintelligence activities conducted by: (1) the Central 
Intelligence Agency; (2) the Department of Defense; (3) the 
Defense Intelligence Agency; (4) the National Security Agency; 
(5) the National Reconnaissance Office; (6) the National 
Geospatial-Intelligence Agency; (7) the Departments of the 
Army, Navy, and Air Force; (8) the Department of State; (9) the 
Department of the Treasury; (10) the Department of Energy; (11) 
the Department of Justice; (12) the Federal Bureau of 
Investigation; (13) the Department of Homeland Security; and 
(14) the U.S. Coast Guard. The Committee has exclusive 
legislative, authorizing and oversight jurisdiction of these 
programs.
    The Department of Defense TIARA programs are a diverse 
array of reconnaissance and target acquisition capabilities 
that provide direct information support to military operations 
within the basic military force structure. TIARA, as defined by 
the Joint Chiefs of Staff and the Secretary of Defense, include 
those military intelligence activities outside the General 
Defense Intelligence Program that respond to the needs of 
military commanders for operational support information, as 
well as to national command, control, and intelligence 
requirements. The Committee on Armed Services in the House of 
Representatives shares oversight and authorizing jurisdiction 
of the programs comprising TIARA with the Permanent Select 
Committee on Intelligence.
    The JMIP provides integrated program management of defense 
intelligence elements that support defense-wide or theater-
level consumers. Included within the JMIP are aggregations of 
similar activities, either in intelligence discipline (e.g., 
Signals Intelligence (SIGINT), Imagery Intelligence (IMINT)), 
or function (e.g., satellite support, aerial reconnaissance). 
The following aggregations are included in the JMIP: (1) the 
Defense Cryptologic Program (DCP); (2) the Defense Geospatial-
Intelligence Program (DGIP); and (3) the Defense General 
Intelligence Applications Program (DGIAP). The DGIAP includes 
(a) the Defense Airborne Reconnaissance Program (DARP), (b) the 
Defense Intelligence Tactical Program (DITP), (c) the Defense 
Intelligence Special Technologies Program (DISTP), (d) the 
Defense Intelligence Counterdrug Program (DICP), and (e) the 
Defense Space Reconnaissance Program (DSRP). As with TIARA 
programs, the Committee on Armed Services in the House of 
Representatives shares oversight and authorizing jurisdiction 
of the programs comprising the JMIP with the Permanent Select 
Committee on Intelligence.

                     Committee Statement and Views


                 A. BACKGROUND AND NEED FOR LEGISLATION

    The legislation is the product of the Committee's 
comprehensive review of the President's fiscal year 2006 budget 
request, carrying out its annual responsibility to prepare an 
authorization based on close examination of the U.S. 
government's intelligence programs and proposed expenditures. 
The Committee and, in some cases, its component subcommittees, 
held ten budget-related hearings and hundreds of briefings for 
Members and Staff covering all major intelligence programs 
within the National Intelligence Program, the Joint Military 
Intelligence Program, and the Tactical Intelligence and Related 
Activities accounts. This review also covered all functional 
capabilities, such as human intelligence, signals intelligence, 
imagery intelligence, analysis, counterintelligence, 
counternarcotics, and counterterrorism.
    As always, the Committee's legislative and budgetary 
actions are based on more than these budget-specific hearings 
and briefings. The actions taken in this bill are the result of 
the Committee's ongoing, rigorous oversight of the U.S. 
Intelligence Community. This oversight activity includes the 
scores of Committee and subcommittee hearings and briefings, 
site visits, and fact-finding trips, and studies of 
intelligence capabilities, strategies, plans, and challenges 
conducted throughout the year.
    Of particular note is the time and attention the Committee 
has devoted to the creation of an Intelligence Community for 
the 21st Century. Over the past year, the Congress has passed 
sweeping legislation to reform the U.S. Intelligence Community. 
This included the creation of a Director of National 
Intelligence (DNI) to oversee all aspects of the community. The 
Committee is committed to supporting all efforts that will make 
the DNI successful in better integrating the disparate members 
of the Intelligence Community and creating the best possible 
intelligence capabilities for America. Further, the Committee 
has been focused on, and will continue to commit a great deal 
of effort to, overseeing the implementation of the reform 
legislation provisions as well as ensuring that specific 
intelligence efforts in support of the Global War on Terrorism 
(GWOT) are conducted in accordance with established and 
approved procedures. The tangible results of these efforts are 
just being seen, as the first DNI has recently been sworn in, 
and specific reform activities are beginning to take place.
    The Committee has conducted its oversight responsibilities, 
the Members and the Staff have had the opportunity to meet and 
work with intelligence professionals throughout the community 
and around the world. The Committee holds in highest regard the 
work accomplished by these dedicated U.S. Intelligence 
Community personnel. At great sacrifice, often under extreme 
and intense conditions, and at great personal risk, the men and 
women of the Intelligence Community continue to perform their 
missions with great energy, and enormous devotion to duty. The 
Committee commends these patriots for their professionalism, 
integrity and perseverance. These honorable people form the 
first line of our national defense, and the freedom and 
security of our country relies on their success.

The U.S. intelligence community--a need for change

    In recent years, U.S. intelligence efforts have been 
criticized by some for specific ``intelligence failures.'' The 
Committee's view is that, more rightly, the Intelligence 
Community's efforts should be recognized as a critical weapon, 
particularly in the Global War on Terrorism. The many reviews 
of the nation's intelligence efforts, including the National 
Commission on Terrorist Attacks Upon the United States (9/11 
Commission) and the Commission on the Intelligence Capabilities 
of the United States Regarding Weapons of Mass Destruction (WMD 
Commission) have in the past several years been harshly but, in 
many respects, constructively critical of the Intelligence 
Community's management, operations, and products. It is these 
reviews that helped spur the reform legislation that President 
Bush signed into law, as the Intelligence Reform and Terrorism 
Prevention Act of 2004.
    The Committee agrees with many of the recommendations of 
these reviews. The demands and the resources expended for the 
U.S. Intelligence Community have increased dramatically since 
the attacks of September 11, 2001. These increases were 
critically necessary, particularly when viewed against the 
historical underinvestment and lack of support in the years 
preceding the attacks on America. Yet, these increases demand 
results--results in the form of better intelligence support to 
keep the nation safe. Many of the reviews provided specific and 
logical recommendations that the Community as a whole has 
historically resisted. The Committee agrees with the general 
premise that the Intelligence Community must be more receptive 
to change. Organizational, operational, and philosophical 
changes are critical to the future of the Community.
    Unfortunately the bureaucratic resistance to change is a 
cultural problem that will take time and focused effort to 
correct. Over the past number of years the Committee has 
repeatedly made recommendations for correcting known problems. 
Many of these recommendations have been found correct and/or 
reinforced by the President's WMD Commission findings. Some of 
the specific Committee recommendations have included:
          1. The Intelligence Community must have sufficient 
        numbers of human intelligence officers and analysts 
        whose skills are specifically designed to respond 
        aggressively to the full range of modern threats. This 
        includes a robust cadre of case officers capable of 
        entering the most austere of environments and acquiring 
        much needed information. The diverse set of analytic 
        problems requires an equally robust cadre of expert 
        analysts that can sift through the massive volumes of 
        information to find the obscure references, and mine 
        the critical information nuggets that lead to 
        actionable intelligence. Although much can be achieved 
        through technological collection means, the 
        Intelligence Community still requires highly trained 
        personnel who bring the cognitive skills to bear that 
        allow the understanding of information nuances, foreign 
        cultures and who can speak the languages of the various 
        intelligence targets. Year after year, this Committee 
        has insisted that the Intelligence Community recruit a 
        more culturally diverse cadre of analysts and officers, 
        especially seeking individuals proficient in critical 
        languages such as Arabic, Chinese, and, the much less 
        well known languages including Pashtu and Urdu. The 
        Committee is heartened by the President's call to 
        increase, significantly, the number of human 
        intelligence andanalytic officers in the Intelligence 
Community. Before this Administration call though, and on a bipartisan 
basis, the Committee had repeatedly increased funding to enhance human 
collection and analysis capabilities by funding language proficiency 
training, ``cultural immersion,'' and tradecraft. But only now is the 
Community witnessing the beginnings of modest change in these diverse 
areas.
          2. The Intelligence Community's technical collection 
        architecture has, for a number of years, been in need 
        of a coherent strategic plan. There is no question that 
        technical collection programs are critical to the 
        nation's intelligence gathering capabilities. Satellite 
        systems, airborne reconnaissance aircraft, ships and 
        land-based technical collection systems form a system 
        of systems to collect imagery, signals, and other 
        technical information not necessarily accessible by 
        human sources. However, such technical collection 
        systems satisfy only a part of the overall information 
        needs, and must be backed up by world-class human 
        intelligence collection and analysis. Unfortunately, 
        the Committee finds that the funding levels of effort 
        in the budget request are weighted far too heavily 
        toward expensive technical systems. The Committee has 
        repeatedly called for a rationalized technical 
        architecture that appropriately balances the depth and 
        breadth of these systems with both the human collection 
        and analysis requirements and their funding across the 
        Community. Again, the Community has resisted 
        terminating even badly flawed major systems 
        acquisitions and investing the resulting savings in 
        human capabilities. The Committee's position in this 
        year's authorization makes a number of recommendations 
        to significantly reposition funding from technical 
        programs to human intelligence and analysis. The 
        Committee recognizes these are significant changes, but 
        believes strongly that these major decisions must be 
        made.
          3. Recognizing the need for better and more 
        productive intelligence on terrorist financing, in the 
        fiscal Year 2004 Intelligence Authorization Act, the 
        Committee established a Treasury Department Office of 
        Intelligence and Analysis. Interrupting the flow of 
        money to terrorists and proliferators is a self-evident 
        first response to the threats of the 21st Century. Yet, 
        the response to this direction was slow, and only now 
        is this office being created.
          4. The Committee has been deeply concerned since at 
        least the mid-1990s about the security at the National 
        Laboratories. The labs are the site of some of the 
        nation's most sensitive research. The Committee's 
        security and counterintelligence concerns have 
        repeatedly been given short shrift, and important 
        safety precautions have gone under-funded or even 
        unfunded. This clearly needs to be corrected.
    These are just examples of a large number of problems the 
Committee has repeatedly identified. These problems can be 
solved, but only with great effort. That effort will 
necessarily require the Intelligence Community's leadership to 
develop, implement, and maintain a strategic plan that is long-
term in nature, but that is also flexible enough to accommodate 
and react to temporal change in the world's threat environment. 
The Committee specifically addresses in the general provisions 
section of this report several issues with respect to strategic 
planning.
    Finally, the Committee notes that with the passage of the 
Intelligence Reform bill the Federal Bureau of Investigation's 
importance to the overall security of the nation will grow 
dramatically. The Committee believes strongly that the FBI must 
be fully integrated into the Intelligence Community if its 
information and resources are to be fully applied to efforts to 
combat terrorism and protect the homeland. To ensure this is a 
successful effort, the FBI must clearly define its intelligence 
activities and conduct them in a manner consistent with other 
national intelligence activities, including full coordination 
with the Director of National Intelligence and enhanced 
reporting to Congressional intelligence committees. The 
Committee will also carefully review the recommendations of the 
President's Commission on Weapons of Mass Destruction that a 
single National Security division be created within the 
Department of Justice.

Understanding the threat

    Unquestionably, those entrusted with the nation's security 
must have the best possible intelligence information. That 
information--from its many sources--must be fully integrated to 
form the clearest possible picture of the myriad day-to-day 
``tactical'' threats, as well as the longer-term ``strategic'' 
threats facing America. To that end, on December 17, 2004, the 
President signed into law the Intelligence Reform and Terrorism 
Prevention Act, the first major reorganization of the 
Intelligence Community since 1949. The purpose of this landmark 
legislation is to promote an integrated Intelligence Community 
capable of responding to the complex range of threats that the 
United States now faces.
    The collapse of the Soviet Union did not usher in an era of 
peace and stability as many had expected. Rather, the end of 
the Cold War actually set the stage for many ideological, 
political, and military upheavals that even now continue to 
unfold into conflicts or armed threats--threats to America and 
its allies everywhere. As the Intelligence Community looks to 
the future, it finds potential threats that include: new global 
and regional powers who may be anxious to test the boundaries 
of the existing balances of power; elements that may not 
recognize the legitimacy of their local governing authorities 
and therefore attack it; and other non-governmental entities, 
including terrorist organizations that may attempt to acquire 
and use weapons that cause indiscriminate death and violence. 
It is a future where scientific and technological breakthroughs 
may produce rapid shifts in the power structure, and where 
shortages of basic resources (energy, water, arable land) could 
cause nations to rethink their commitment to the rule of law. 
In this new environment, threats such as terrorism and the risk 
of attack with weapons of mass destruction have assumed a much 
more lethal and immediate reality.
    As the international community continues to ``globalize,'' 
there will be nations that are ``winners'' and those that are 
``losers.'' The National Intelligence Council points to India 
and China, Brazil, and Indonesia, as states with potential to 
emerge as global powers. The combination of economic growth, 
sustained military spending, and a strong sense of national 
identity point toward an increasingly prominent global role for 
such emerging powers. It will be the Intelligence Community's 
responsibility to provide the accurate forecasts to enable the 
nation's political leaders to know whether these emerging 
powers are friends or potentialadversaries. These leaders must 
also know whether former foes have truly become lasting partners. In 
addition, the Intelligence Community must recognize the threats and 
opportunities posed by obvious potential enemies, as well as any other 
adversary that may emerge. In sum, the United States must have an 
accurate understanding of the capabilities and intentions of the 
nations with whom we interact. This is the task of the Intelligence 
Community. This task will require a proper balance between long-range 
intelligence analysis for the policymaker and the more ``tactical'' 
analysis for the employed ``warfighter.''
    While focusing on nation-states is crucial, the Community 
must at the same time remain vigilant about the threat posed by 
emerging non-nation state actors. As is made abundantly clear 
in the 
9/11 and WMD Commission reports, our enemies are varied, 
intelligent, dedicated and determined. Terrorists have 
demonstrated the ability to strike within the United States, 
and the threat of terrorist attack will remain for the long-
term foreseeable future. The worldwide drug trade and the 
emergence of global criminal networks will continue to pose a 
fundamental threat to the United States. The willingness of 
criminal organizations and others to traffic in human beings, 
materials of all sorts, and possibly even dual-use components 
associated with weapons of mass destruction increases the 
likelihood that chemical, biological or radiological weapons 
could become weapons of terror inside America. In the face of 
such wide-ranging non-traditional threats, our Intelligence 
Community must be able to predict and respond with increasing 
agility. The Committee addresses this issue specifically in 
other parts of this report.
    The task of the Intelligence Community is made even more 
complicated by the need to identify mass political movements 
that could negatively affect U.S. interests. Population 
changes, the rising cost of raw materials, and technological 
advances all continue to deepen the divide between the 
``haves'' and the ``have nots'', our political leaders need 
information that distinguishes legitimate social reform from 
the movements that give rise to the next Usama bin Laden or 
Fidel Castro.
    Clearly, the 21st Century is likely to include far greater 
risks than this nation has ever faced. The task of the Director 
of National Intelligence is to adapt the Intelligence Community 
to those challenges, and the challenges as yet unanticipated.

Responding to the threat

    As stated, the Intelligence Community must fully understand 
the nature--both depth and breadth--of the threats to the 
nation. Once these threats are understood, the Community must 
then be well-postured to collect, analyze, and produce accurate 
information and estimates on those threats. Our capabilities 
must be tailored to those threats. The Community must 
understand what its current and projected capabilities are to 
provide needed information, and, perhaps more importantly, what 
they are not. Only armed with that knowledge, can informed 
decisions be made with respect to overall community-wide 
funding allocations. This is the strategic approach the 
Committee used to evaluate and respond to the fiscal year 2006 
budget request, and this is a strategic approach that the 
Committee hopes the new Director of National Intelligence will 
provide to the Intelligence Community.
    As the United States grapples with the myriad threats posed 
to national security through both state and non-state actors 
that wish to inflict harm, it is the Intelligence Community's 
responsibility to optimize its full range of intelligence 
capabilities to provide policy makers, lawmakers and other key 
customers the quality intelligence they need to proactively 
make national security decisions. The Committee notes that the 
creation of the position of the Director of National 
Intelligence was meant to provide an Intelligence Community 
``Chief Executive Officer'' whose responsibilities include 
making the intelligence agencies to work collectively to 
leverage all collection, analysis and dissemination 
capabilities to develop the most effective intelligence 
capabilities possible. The Committee fully intends that this 
individual will lead and manage the Community with complete 
support from each Intelligence Community agency and department 
head. As stated previously, it is the Committee's position that 
it will fully support the DNI in his efforts to coordinate the 
Intelligence Community's efforts to provide quality information 
to the various U.S. government users.
    Looking at the Community as a whole today, the Committee 
finds continuing gaps in capabilities and fundamental flaws in 
the management of resources and personnel that should 
ultimately remedy those gaps. To the extent that these concerns 
may be outlined in an unclassified manner, the Committee has, 
in part, addressed them in the ``Areas of Special Interest/
General Provisions'' section immediately following. A complete 
discussion of the Committee's specific oversight findings and 
recommendations is contained in the classified annex to this 
report. This legislation, along with its accompanying report 
and classified annex, contains the Committee's specific 
recommendations as to where the U.S. Intelligence Community 
should be heading, how it can posture itself for strategic 
superiority, and how the fiscal year 2006 intelligence budget 
should be invested.

                             B. LEGISLATION

    The bill and accompanying classified schedule of 
authorizations includes the Committee's recommended 
authorizations for the President's Fiscal Year 2006 budget 
request. This includes an authorization for the intelligence 
portion of the expected Fiscal Year 2006 supplemental funding 
requirement for the world-wide effort against terrorism and 
operations in Iraq and Afghanistan. The Committee views these 
funds as an integral part of the fiscal year 2006 budget and 
has decided to specifically authorize these activities for the 
full year in this legislation.
    The Committee applauds the President for requesting, in the 
base budget request, a large portion of the surge funding that 
is expected for the Global War on Terrorism for fiscal year 
2006. The Committee understands that this does not obviate the 
total funding need, but notes that this is a major step toward 
ending the practice--begun in earlier administrations--of 
funding critical operational intelligence and military 
requirements via supplemental appropriations. Funding by 
supplemental is a practice the Committee has addressed in great 
detail in past reports, and one that it believes should end.
    H.R. 2475 provides strategic and substantial enhancements 
in funding for critical world-wide intelligence capabilities. 
As stated, the Committee believes there is an urgent need to 
betterbalance funding for human capabilities and technical 
collection systems. For a number of reasons fully explained in the 
classified annex, the Committee has made some specific and major 
recommendations to realign funding. These changes include:
          Increased investment in U.S. human intelligence 
        (HUMINT) activities, including training, 
        infrastructure, and global capabilities;
          Improvements to intelligence analysis: training, 
        coverage and depth;
          Reductions or eliminations of funding for redundant 
        or unjustified technical collection systems;
          Improvements to the structure and management of the 
        disparate elements of the intelligence community's 
        information technology systems; and
          Increases to U.S. counterintelligence resources and 
        capabilities.
    In addition to authorization for intelligence and 
intelligence-related activities, the bill includes provisions 
intended to clarify certain authorities of the Director of 
National Intelligence and of the Director of the Central 
Intelligence Agency. These provisions are intended to further 
refine and strengthen the authorities provided to the DNI in 
the Intelligence Reform and Terrorism Prevention Act of 2004 
with the goal of ensuring that the Director has full authority 
to oversee, coordinate, and manage the activities of the 
Intelligence Community.
    The Committee reported this legislation favorably to carry 
out the results of its intensive research into the many 
functions, operations, and acquisition programs of the 
Intelligence Community. These actions are, in many respects, a 
departure from the norm as they are neither minimalistic nor 
timid ``nibbling at the edges.'' The recommendations made by 
the Committee are bold and decisive and are intended to begin a 
process of fundamental change for the Intelligence Community. 
Although the Committee expects some discomfort within the 
Intelligence Community with respect to some of the provisions, 
it agrees with numerous outside observers that the Intelligence 
Community requires external assistance to affect meaningful 
change. The Intelligence Authorization Act for Fiscal Year 2006 
is intended to provide such assistance.

                  C. ENHANCED CONGRESSIONAL OVERSIGHT

    The Committee's legislative recommendations are only part 
of its responsibility for overseeing the nation's intelligence 
efforts. The reforms recommended by the 9/11 and WMD 
Commissions were intended to improve the intelligence 
capabilities of the nation--regardless of branch of government. 
Based on that intent, the Committee has taken a number of steps 
to improve overall Community management and congressional 
oversight.
    Recommendations for change, for example, also included 
congressional oversight. To improve its ability to more 
effectively oversee the Intelligence Community, the Committee 
has created a Subcommittee on Oversight. The Oversight 
Subcommittee is tasked with general oversight of the activities 
of the Intelligence Community, and will place special emphasis 
on overseeing the implementation of the Intelligence Reform and 
Terrorism Prevention Act of 2004. The Subcommittee is also 
focused on ensuring the IC properly aligns collection, 
analysis, and dissemination efforts against known and expected 
future threats. The Subcommittee aims to assist in transforming 
the IC into a collaborative and effective community, in the 
truest sense.
    The Subcommittee has also begun to review issues that 
suggest the possibility of pervasive problems that require 
review or discrete recommendations for resolution. One such 
example is information sharing. The Committee believes that 
methods and procedures must be put into place to properly share 
and assure access to information for the people who need it, 
regardless of the specific agency to which they belong. 
Information ``ownership'' must be a concept of the past, not 
the future.
    The Committee believes that a way to effectively ensure the 
necessary reforms discussed here is through a strategic 
planning process developed by the DNI for the entire community. 
Elsewhere in this report, the Committee recommends that the 
Director of National Intelligence create a formalized, 
periodic, structured review process for the Intelligence 
Community, much like the Department of Defense's Quadrennial 
Review Process.

            D. AREAS OF SPECIAL INTEREST/GENERAL PROVISIONS

    In this section, the Committee highlights areas of concern 
that it believes must be addressed with a high priority by the 
Director of National Intelligence (DNI), as the leader of the 
Intelligence Community, if intelligence sufficient to protect 
our national security is to be obtained and provided to policy 
makers. The Committee places particular emphasis on issues that 
impact the Intelligence Community as a whole or that involve 
several programs.

Strategic planning process

    The Committee believes that achieving the necessary reforms 
of the Intelligence Community will only occur through a 
strategic planning process. The Committee notes that a 
formalized, periodic, and structured review, much like the 
Quadrennial Defense Review process used by the Department of 
Defense, could be a model for the Intelligence Community. Such 
a strategic review, and the resulting forward-looking strategy, 
could identify the breadth and depth of the threats, the 
capabilities existing and needed to combat those threats, and 
better identify the alignment of resources, authorities, and 
personnel needed to support those required capabilities. Such a 
review could enable the Intelligence Community to more readily 
make and accept change, infuse flexibility into its management 
and operational structures, and would enable the Director of 
National Intelligence to gain insight over the intelligence and 
intelligence-related resources throughout the United States 
government.
    Therefore, the Committee recommends that the Director of 
National Intelligence develop a process for a Quadrennial 
Intelligence Review by the end of fiscal year 2008. The 
Committee requests the DNI provide the Intelligence Committees 
of the House and Senate a plan for initiating and conducting 
this review. With the help of this review, the DNI should 
develop and periodically adjust a National Intelligence 
Strategy that would inform the types of informationneeded to 
support national priorities and objectives. Determination could then be 
made about which intelligence discipline, or disciplines, can best 
provide the required information. Those decisions could in turn flow 
down to the development and tasking of specific capabilities. Once this 
is completed, the DNI would be better postured to allocate the funding 
for the various capabilities needed and to project future budget 
resources required by the various intelligence disciplines.

Comprehensive inventory of Department of Defense intelligence programs

    The Committee notes and appreciates that the Department of 
Defense is working with the Committee and the Intelligence 
Community to provide greater visibility into those 
intelligence-related programs funded within the Department. The 
Committee understands that Department has initiatives underway 
to develop a Military Intelligence Program (MIP) that will 
provide greater visibility for congressional committees with 
oversight responsibility. Unfortunately, the Committee believes 
that it does not have full visibility over some defense 
intelligence programs that do not clearly fall into the Joint 
Military Intelligence Program (JMIP) or under Tactical 
Intelligence and Related Activities (TIARA) categories. 
Specifically, the Committee notes that individual services may 
have intelligence or intelligence-related programs such as 
science and technology projects or information operations 
programs related to defense intelligence that are embedded in 
other service budget line items, precluding sufficient 
visibility for program oversight. Greater transparency into 
these programs and projects will enhance congressional 
oversight and permit identification of potentially duplicative 
programs in other services.
    The Committee directs the Secretary of Defense, in 
consultation with the Director of National Intelligence, where 
appropriate, to provide to the armed services and intelligence 
committees a comprehensive inventory of Department of Defense 
intelligence and intelligence-related programs and projects. It 
is not intended that this inventory encompass military 
operations or military activities. This inventory shall abide 
by existing procedures for the handling of special access 
programs referenced in Section 119 of title 10, United States 
Code and applicable Department of Defense directives.
    This report will be delivered to the congressional 
committees within 180 days of the enactment of this bill.

Budget execution authority

    The Intelligence Reform and Terrorism Prevention Act of 
2004 gave the Director of National Intelligence (DNI) 
significant new budgetary responsibilities and authorities, 
particularly in relation to budget execution. The DNI is now 
responsible for the effective execution of the annual 
intelligence budget. The legislation gave the DNI a number of 
budgetary tools to accomplish this through the funding process. 
For example, The Director of Management and Budget apportions 
the appropriations for the annual National Intelligence Program 
(NIP) at the exclusive direction of the DNI. The DNI has the 
legal authority to direct the allocation and allotment of NIP 
funding to each intelligence organization through the 
departmental secretaries. Each departmental comptroller 
provides funds to the individual intelligence organizations 
based on the DNI's direction in an ``expeditious manner.'' Once 
the funds are transferred to an intelligence organization, it 
is the responsibility of the DNI to monitor the implementation 
and execution of that budget. And, finally, the DNI is required 
by law to notify Congress each time he discovers that a 
departmental comptroller has not followed his explicit 
direction.
    Finally, the Committee recognizes that the DNI has just 
recently been sworn in and taken on the responsibilities of the 
new position, but believes that he should begin immediately to 
establish the budgetary processes and procedures, in 
consultation with the department secretaries and each 
intelligence organization, to carry out these budgetary 
oversight responsibilities and authorities. These authorities 
will be one of the DNI's most important management tools with 
which to drive reform across the Intelligence Community. In the 
Committee's view, it is essential that the DNI begin exercising 
these authorities as soon as possible. There remains some 
concern that there will be resistance on the part of some to 
develop the necessary processes to instantiate these statutory 
responsibilities. The Committee urges the departments and 
Intelligence Community agencies to move quickly to develop the 
procedures and processes the DNI needs to effectively exercise 
his budget authorities. The Committee requests that copies of 
departmental and agency procedures developed to respond to DNI 
budgetary process requirements be delivered to the intelligence 
authorization committees as soon as they become available.
    The Committee recognizes that the DNI is in the midst of 
establishing the Office of the DNI and that he will need to 
increase the number of staff with Intelligence Community budget 
execution expertise. The Committee believes that the Office of 
Management and Budget should assist the DNI in establishing 
this functional component within the Office of the DNI.

Integrated intelligence enterprise

    The Commission on the Intelligence Capabilities of the 
United States Regarding Weapons of Mass Destruction (WMD 
Commission) recommended the creation of an ``integrated 
collection enterprise'' to ensure that the decentralized 
Intelligence Community collection capabilities could be managed 
in a coordinated way so as to address the many intelligence 
priorities. According to the report, such integration would 
occur only by managing the Intelligence Community ``above the 
stovepipes'' using ``mission managers.'' These mission managers 
would develop cross-discipline collection and analysis 
strategies. Such strategies would require that individual 
agencies fully share information across the intelligence 
enterprise and that ``information ownership'' becomes a concept 
of the past.
    The Committee agrees with the WMD Commission that the 
Director of National Intelligence (DNI) should focus on 
integrating the Intelligence Community so that it acts as a 
single enterprise with unity of action against the highest 
priority intelligence issues. The WMD Commission's report, the 
Intelligence Reform and Terrorism Prevention Act of 2004, and 
the confirmation of the DNI present a unique opportunity for 
this necessary reform to proceed.
    The Committee also agrees that the concept of mission 
managers appears to be sound and that this should build on the 
excellent work done by the Associate Director of Central 
Intelligence for Collection (ADCI/C) and the Collection Concept 
Development Center. From the Committee's perspective, the ADCI/
C did not have sufficient funding or personnel to truly drive 
collection across all the top priority targets, despite that 
fact he consistently worked to developan Intelligence Community 
collection strategy for the most important targets. The ADCI/C's 
efforts resulted in some success to conduct collection in an integrated 
fashion and to develop new strategies that included highly innovative 
collection techniques. The ADCI/C's efforts were, however, limited with 
respect to incorporating the Department of Defense's Joint Military 
Intelligence Program and Tactical Intelligence and Related Activities 
programs and capabilities by the extent to which the DoD was willing to 
participate. The Committee believes that all components of the 
Intelligence Community must be responsive to the Collection Concept 
Development Center, and that the DNI should build on the 
ADCI/C's previous integration efforts by creating mission managers for 
each priority intelligence target.
    The WMD Commission envisioned the mission managers 
cataloging what the Intelligence Community knows about a 
target, what the Intelligence Community needs to know about a 
target, and what collection capabilities can potentially do 
against a target, including sensitive collection capabilities. 
The Committee believes creation of mission managers could allow 
for the chairing of a ``target development board'' consisting 
of target experts, both analysts and representatives from each 
of the collection disciplines, who would create strategies to 
conduct rationalized collection by the appropriate application 
of HUMINT, SIGINT, IMINT, Open Source, and MASINT capabilities. 
Such a strategic approach could assign collection 
responsibility to the capabilities that best provide the needed 
information. If none of the existing ``stovepiped'' 
capabilities could address the need, then the mission manager 
and board would develop/propose new processes and methods to 
address collection of the needed information.
    The strategies developed by mission managers should be end-
to-end, focusing on analyst-driven collection through 
information dissemination, allocating analytic responsibility 
so that all aspects of priority intelligence issues are 
addressed. The mission managers could also develop the analytic 
standards and strategies for the mission, identifying the 
skills and experience that are necessary for the analysts and 
drive their training and career development. Allocation of 
analytic responsibility should also factor in the need for 
independent analysis and unique departmental analytic 
requirements. The Committee is convinced that mission managers 
and coordinated target development are important pieces of the 
overall integration of the Intelligence Community.
    Finally, the Committee believes that the DNI and the 
mission managers must facilitate analysts' access to all 
necessary information. The DNI should establish a community-
wide information access approval process to enable full access 
based on mission roles and defined security methodologies. 
Access to information should be based on roles and mission, not 
the agency for which a particular analyst works. Again, data 
ownership within the Intelligence Community must become a 
concept of the past. Access should be subject to the DNI's 
determination, balancing the need to protect sources and 
methods with the analysts need to access relevant data. For 
extremely sensitive collection capabilities, the Committee 
believes that the DNI should develop specific methods for 
ensuring necessary data is available to the analyst cadre, but 
that such restrictions should balance security with the 
accomplishment of mission. Collected intelligence belongs to 
the U.S. Government, not to individual collection agencies. 
Simply stated, the DNI must empower the Intelligence Community, 
through firm policies and directives, to increase information 
integration.
    Therefore, the Committee believes the DNI should establish 
mission managers for priority intelligence targets, some of 
which will be transitory in nature and eliminated as missions 
change. The Committee agrees with the various commission 
reports that better integration of the disparate agencies and 
entities within the Intelligence Community is the most 
important challenge facing the DNI. Finally, to ensure the most 
optimum intelligence capabilities for the future, the DNI and 
the Secretary of Defense must ensure that the intelligence and 
intelligence-related activities within the Department of 
Defense are seamlessly integrated into the DNI's processes.

Intelligence analysis

    One of the most important emphasis areas on which the 
Committee has focused is analysis. The Committee feels strongly 
that analysis must be the keystone of the Intelligence 
Community. Because effective intelligence production requires 
putting together puzzles without all the pieces, and the 
collection of intelligence is an imperfect art rather than a 
science, it is imperative that the data collected through the 
nation's various collection capabilities be analyzed in a 
timely, accurate manner. The needs of the analytic corps and 
the production of substantive finished intelligence reports 
must drive collection efforts and associated funding. Decision 
makers rely on analysis to enable strategic responses to 
threats as well as tactical efforts to preempt attacks. Indeed, 
analysis must identify threats and enemies, inform about the 
specific intentions of those enemies, and equip the nation to 
better combat these identified threats.
    U.S. Intelligence Community analysts are the best in the 
world, but the analysis they produce is not always as good as 
is needed. A number of shortcomings continue to limit the 
Intelligence Community's ability to give our national decision 
makers sufficient insight into complex issues and warning of 
over-the-horizon threats. No one can reasonably expect perfect 
knowledge, but the Committee expects the DNI, using authorities 
provided by the Intelligence Reform and Terrorism Prevention 
Act of 2004, to address shortcomings that prevent analysis from 
playing a more central role in Community activities. The 
Committee applauds the creation of a Deputy DNI for Analysis 
(DDNI/A) position within the DNI's office as this indicates the 
priority that will be given to this issue.
    Notwithstanding the positive steps already taken, the 
Committee believes that there are a number of additional steps 
the DNI should take to improve Community analytic quality:
          (1) Demand more strategic analysis of medium and 
        long-term threats. The DNI should encourage analysts to 
        identify critical factors and potential variables for 
        their consumers, possible outcomes, potential 
        ``leverage points'' and information gaps related to 
        problems under analysis. The Director also should make 
        sure that the analytic community is not ``short 
        changing'' support mid-level and junior consumers.
          (2) Develop a well-trained, experienced analytic 
        corps that is large enough to drive the rest of the 
        Intelligence Community's actions. The DNI must create 
        new recruitment and utilization strategies that make 
        best use of the highly-transitory 21st Century 
        workforce and strengthen retention to the maximum 
        extent possible by creating incentives for career 
        analysts tobecome substantive experts. The CIA's Senior 
Analytic Service encourages strategic intelligence, rewards sound 
tradecraft, and recognizes in-depth expertise; the Deputy DNI for 
Analysis should look into creating a Community-wide program modeled on 
it. Moreover, the workforce must be large enough to allow analysts to 
develop expertise on a particular issue, instead of being ``surged'' 
from one crisis to the next.
          (3) Ensure that analysts have training and related 
        resources to prepare them for their responsibilities. 
        Analysts and their supervisors should also be taught to 
        use structured analysis, and should be given a thorough 
        understanding of intelligence collection methods, 
        procedures and systems.
          (4) Create a corporate enterprise of analysts across 
        the Intelligence Community. Analysts need information 
        technology tools to help them collaborate and share 
        information virtually, but more importantly they need 
        to be taught that their counterparts at other agencies 
        are not rivals. The DNI should initiate activities to 
        strengthen ties among analysts across the Intelligence 
        Community. These activities could include regular 
        roundtables--both physical and virtual--where analysts 
        covering specific issues can meet one another and 
        exchange ideas, the creation of analytic community-of-
        interest mailing lists, Intelligence Community-wide 
        seminars and lectures, and off-site retreats where 
        analysts from across the Community can build 
        professional networks. The Committee also expects the 
        DNI to develop and enforce Intelligence Community-wide 
        standards for analytic tradecraft and training.
          (5) Break down the walls between analysts and 
        collectors. The DNI should develop Mission Managers 
        and/or Centers of analysts and collectors from across 
        the Intelligence Community to direct intelligence 
        collection to best meet the highest priority 
        requirements and fill analytic gaps.
          (6) Enable the Intelligence Community to better 
        harness open source information and outside expertise 
        to complement and enhance clandestine sources of 
        information. In addition to spurring the development of 
        technology tools to drive use of open sources, the DNI 
        needs to push the Intelligence Community to 
        reinvigorate its libraries, hire researchers to help 
        analysts sort wheat from chaff, and train analysts on 
        the value and use of available alternative resources. 
        The DNI should also review security policies and legal 
        restrictions across the Intelligence Community with the 
        aim of enabling analyst interaction with outside 
        peers--particularly scientists and engineers who could 
        help assess the significance of technology information 
        and programs.
    The DNI and the DDNI/A are inheriting a talented analytic 
corps. However, several key recommendations regarding analysis 
must be implemented. The Committee has recommended additional 
funds for the Intelligence Community in fiscal year 2006 to 
hire more analysts, develop analytic tradecraft and tools, and 
evaluate its training capacity. The Committee expects the DNI 
to use these funds to act decisively to correct the Community's 
analytic problems and hopes to see progress before the next 
fiscal year. The Committee will fully support the DNI in the 
pursuit of this goal.

Improper disclosures of classified information

    The Committee is concerned about continuing instances of 
improper disclosure of classified information and shares the 
conclusion of the President's Commission on the Intelligence 
Capabilities of the United States Regarding Weapons of Mass 
Destruction that ``a persistent inability to protect human and 
technical collection sources and methods has substantially 
damaged U.S. intelligence capabilities.'' As the Commission 
noted and discussed in greater detail in the classified version 
of its report, authorized and unauthorized disclosures have 
compromised critical signals interception and satellite imagery 
programs, as well as hard-earned human intelligence sources. 
The Committee is also concerned about several recent such 
incidents not discussed in the Commission's report.
    The Committee will continue to focus careful attention on 
this issue, and it encourages the Department of Justice to 
place a higher priority on investigating and prosecuting 
illegal disclosures of classified information. As the 
Commission noted, hundreds of ``leaks'' have been reported to 
the Department over the past ten years, without a single 
indictment or prosecution. The Committee also will seek to 
ensure that the DNI and individual agencies within the 
intelligence community are aggressively pursuing whatever 
administrative remedies may be available to them to deal with 
unauthorized disclosure of classified information.

Protecting analytic integrity

    As stated previously, consumers of intelligence must be 
confident that the intelligence assessments on which they rely 
reflect the best judgments of knowledgeable analysts. The 
Committee notes that Section 1020 of the Intelligence Reform 
and Terrorism Prevention Act of 2004 requires the Director of 
National Intelligence to identify an individual within the 
Office of the DNI who shall be available to analysts with 
respect to issues relating to analytic tradecraft and the 
objectivity of intelligence analysis. The section also requires 
a report to Congress on the implementation of this provision 
within 270 days after the effective date of the Act. Although 
this report is not yet due for submission, the Committee 
stresses its continuing interest in the DNI's implementation of 
Section 1020.

Increased use of open source intelligence

    The Intelligence Reform and Terrorism Prevention Act of 
2004 noted the critical value of open source intelligence 
(OSINT) and stated Congress's belief that all elements of the 
Intelligence Community should make extensive use of open source 
information. The Act recommended that the DNI explore the 
possible establishment of a center for the purpose of 
collecting, analyzing, producing, and disseminating open source 
intelligence. The President's Commission on the Intelligence 
Capabilities of the United States Regarding Weapons of Mass 
Destruction echoed these sentiments, adding that the 
Intelligence Community must make use of new technologies that 
can retrieve, store, translate, search, prioritize, and 
otherwise exploit the vast amounts of open source information 
available.
    The DNI has expressed to the Committee his view that OSINT 
is important for the future of intelligence and that he intends 
to determine how best to pursue the best use of 
unclassifieddata. The Committee notes its continued interest in this 
issue and in receiving additional information with respect to the DNI's 
plans to more fully collect and utilize OSINT.

Accountability reviews

    The Committee notes its continued interest in two matters 
related to potential accountability issues within the 
Intelligence Community. The first is the CIA's ongoing review 
relating to the accountability, if warranted, of any 
individuals who may have failed to meet professional standards 
related to the identification, prevention, or disruption of 
terrorist attacks, including the 9/11 attacks. The second is 
the recommendation of the President's Commission on the 
Intelligence Capabilities of the United States Regarding 
Weapons of Mass Destruction with respect to accountability. The 
Committee expects the Intelligence Community to provide a 
timely response to its inquiries with respect to these matters, 
as it does with all Committee inquiries.

El Paso Intelligence Center

    The Committee believes that one of the key responsibilities 
of the Director of National Intelligence (DNI) is to improve 
the quality of intelligence related to the security of the 
homeland. The DNI will have to ensure that intelligence and law 
enforcement agencies go in and produce reliable and actionable 
information regarding a wide variety of threats, including the 
trafficking of narcotics, humans, and weapons--activities that 
may support terrorist actions, undermine the social fabric, or 
attack the economic vitality of our nation.
    The Committee notes the important role that the El Paso 
Intelligence Center (EPIC) plays in providing information on 
such threats to the Intelligence Community and to Federal, 
State, and local law enforcement agencies. EPIC's operations-
oriented intelligence initiatives support the interdiction and 
disruption of illicit activities along the nation's southwest 
border, thereby playing a critical role in countering possible 
acts of terrorism and mitigating other threats to the homeland. 
The role of the Intelligence Community in focusing more 
attention to the Central and South American areas is addressed 
extensively elsewhere in this report.
    Although authorization for the activities at EPIC is not 
within the Committee's jurisdiction, the Committee recommends 
that the DNI leverage EPIC's expertise, endorse greater 
information-sharing between EPIC and the Intelligence 
Community, and encourage a closer and more collaborative 
working relationship between EPIC and members of the 
Intelligence Community.

               Committee Consideration and Rollcall Votes

    On May 24, 2004, the Committee met in open and closed 
session and ordered the bill H.R. 2475 favorably reported, as 
amended.

                              OPEN SESSION

    In open session, the Committee considered the text of the 
bill H.R. 2475.
    Chairman Hoekstra offered an amendment in the nature of a 
substitute to H.R. 2475, which was adopted by voice vote after 
consideration of the following amendments to the amendment in 
the nature of a substitute. The contents of the amendment in 
the nature of a substitute are described in the Section-by-
Section analysis and the Explanation of Amendment.
    Ms. Harman offered an amendment to strike Section 305 of 
the amendment in the nature of a substitute, which clarifies 
existing language requiring personnel transfers for new 
National Intelligence Centers to be conducted ``in consultation 
with'' the committees of jurisdiction.
    A recorded vote on this amendment was taken, and the 
Members present recorded their votes as follows: Mr. Hoekstra 
(Chairman)--no; Mr. LaHood--no; Mr. Cunningham--no; Mr. 
Everett--no; Mr. Gallegly--no; Ms. Wilson--no; Ms. Davis--no; 
Mr. Thornberry--no; Mr. McHugh--no; Mr. Tiahrt--no; Mr. 
Rogers--no; Mr. Renzi--no; Ms. Harman--aye; Mr. Hastings--aye; 
Mr. Reyes--aye; Mr. Boswell--aye; Mr. Cramer--aye; Ms. Eshoo--
aye; Mr. Holt--aye; Mr. Ruppersberger--aye; Mr. Tierney--aye. 
Therefore, on a vote of 9 ayes and 12 noes, the amendment was 
rejected.
    Ms. Eshoo offered and, after debate, received unanimous 
consent to withdraw an amendment to establish an Inspector 
General hotline.
    Mr. Ruppersberger offered and, after debate, received 
unanimous consent to withdraw an amendment relating to the 
security clearance process for state and local officials.

                             CLOSED SESSION

    Ms. Harman then moved that the Committee close the meeting 
on the ground that public discussion of the classified portions 
of the bill could endanger national security.
    A recorded vote was taken, and the Members present recorded 
their votes as follows: Mr. Hoekstra (Chairman)--aye; Mr. 
Everett--aye; Mr. Gallegly--aye; Ms. Wilson--aye; Ms. Davis--
aye; Mr. Thornberry--aye; Mr. McHugh--aye; Mr. Rogers--aye; Ms. 
Harman--aye; Mr. Boswell--aye; Mr. Cramer--aye; Ms. Eshoo--aye; 
Mr. Ruppersberger--aye. Therefore, on a vote of 13 ayes and 0 
noes, the meeting was closed.
    Mr. Reyes offered an amendment to modify the funding level 
for a program contained in the classified Schedule of 
Authorizations that was adopted by voice vote.
    Mr. Everett offered and, after debate, received unanimous 
consent to withdraw an amendment to modify the funding level 
for a program contained in the classified Schedule of 
Authorizations.
    Ms. Harman offered and, after debate, received unanimous 
consent to withdraw an amendment to modify the funding level 
for a program contained in the classified Schedule of 
Authorizations.
    The Committee then adopted the classified Schedule of 
Authorizations, as amended, by voice vote.

                              OPEN SESSION

    By unanimous consent, the Committee returned to open 
session. By voice vote, the Committee adopted a motion by the 
Chairman to favorably report the bill H.R. 2475 to the House as 
amended with an amendment in the nature of a substitute.

        Section-by-Section Analysis and Explanation of Amendment

    The provisions of the Substitute are as follows:

Section 1--Short Title and Table of Contents

    Section 1 contains the short title for the bill and the 
Table of Contents.

                    TITLE I--INTELLIGENCE ACTIVITIES

Section 101--Authorization of Appropriations

    Section 101 of the bill authorizes appropriations for the 
intelligence and intelligence-related activities of these 
elements of the United States Government: The Office of the 
Director of National Intelligence (including the National 
Counterterrorism Center), the Central Intelligence Agency, the 
Department of Defense, the Defense Intelligence Agency, the 
National Security Agency, the Departments of the Army, Navy and 
Air Force, the Department of State, the Department of the 
Treasury, the Department of Justice, the Federal Bureau of 
Investigation, the National Reconnaissance Office, the National 
Geospatial Intelligence Agency, the Coast Guard, and the 
Department of Homeland Security.

Section 102--Classified Schedule of Authorizations

    Section 102 provides that the amounts and personnel 
ceilings authorized under Section 101 shall be specified in the 
accompanying classified Schedule of Authorizations, which shall 
be made available to the Committee on Appropriations and to the 
President.

Section 103--Personnel Ceiling Adjustments

    Section 103 permits the Director of National Intelligence 
to authorize employment of civilian personnel in excess of the 
authorized number when the DNI determines that it is necessary 
to the performance of important intelligence functions and 
promptly notifies the congressional intelligence committees.

Section 104--Intelligence community management account

    Section 104 authorizes specified funds, as well as 
classified amounts, for the Intelligence Community Management 
Account and provides that personnel detailed to that staff from 
other agencies are detailed on a reimbursable basis.

 TITLE II--CENTRAL INTELLIGENCE AGENCY RETIREMENT AND DISABILITY SYSTEM

Section 201--Authorization of appropriations

    Section 201 authorizes funds for the CIA Retirement and 
Disability System.

                     TITLE III--GENERAL PROVISIONS

Section 301--Increase in employee compensation and benefits authorized 
        by law

    Section 301 permits the authorized amounts to be increased 
to provide increases in compensation and benefits authorized by 
law.

Section 302--Restriction on conduct of intelligence activities

    Section 302 provides that the authorization of funds in 
this act does not constitute authority for the conduct of any 
intelligence activity not otherwise authorized by the 
Constitution or laws of the United States.

Section 303--Authority of the DNI to appoint overseas representatives

    Section 303 authorizes the Director of National 
Intelligence to assign an individual to be a representative of 
the DNI to support each Chief of Mission in a foreign country. 
The DNI's representative shall oversee and manage all 
intelligence and intelligence-related activities in that 
country. Section 303 also clarifies that this authority does 
not supercede the authority of the CIA Director to coordinate 
human intelligence collection overseas, but that the CIA 
Director's authority to do so is subject to the DNI's broader 
coordination, oversight and management authority.

Section 304--Clarification of delegation of transfer or reprogramming 
        authority

    Section 304 provides a technical clarification that the 
authority to concur in DNI reprogramming of funds in excess of 
the statutory limitations may only be made by the head of an 
executive department or (in the case of the CIA only) by the 
Director of the CIA.

Section 305--Approval of personnel transfer for new National 
        Intelligence Center

    Section 305 clarifies that the DNI's authority to transfer 
personnel in conjunction with establishment of a new National 
Intelligence Center is subject to a response from the 
congressional committees of jurisdiction with respect to 
notification. This provision is intended to clarify existing 
language requiring such transfers to be conducted ``in 
consultation with'' the committees of jurisdiction. The 
provision does not apply to the DNI's general personnel 
transfer authorities.

Section 306--Additional duties for the DNI Director of Science and 
        Technology

    Section 306 provides that the DNI Science and Technology 
Committee shall prioritize research and development related to 
intelligence (in addition to coordinating such research and 
development), including identification of basic, applied, and 
advanced research programs to be carried out by the 
intelligence community. The DNI's Director of Science and 
Technology is also directed to assist the DNI in establishing 
goals for the elements of the intelligence community to meet 
its technology needs. Section 306 further provides for a report 
to Congress by the DNI containing a strategy for the 
development and use of technology in the intelligence community 
through 2021.

Section 307--Comprehensive inventory of special access programs

    Section 307 requires the DNI to submit to the congressional 
intelligence committees by January 15, 2006, a classified 
comprehensive inventory of special access programs conducted 
within the National Intelligence Program.

Section 308--Sense of Congress on budget execution procedures

    Section 308 expresses the Sense of Congress that the DNI 
should expeditiously establish the necessary processes and 
procedures with the heads of executive departments and agencies 
to carry out the budgetary execution authorities in the 
National Security Intelligence Reform Act of 2004.

Section 309--Sense of Congress with respect to multi-level security 
        clearances

    Section 309 expresses the Sense of Congress that the DNI 
should promptly establish and oversee the implementation of a 
multi-level security clearance system across the intelligence 
community to leverage skills of individuals proficient in 
foreign languages.

                 TITLE IV--CENTRAL INTELLIGENCE AGENCY

Section 401--CIA coordination of human intelligence

    Section 401 provides two clarifications with respect to the 
authority of the Director of the Central Intelligence Agency to 
coordinate intelligence overseas. First, it clarifies that the 
authority extends to all human intelligence collected overseas 
by any department, agency, or element of the United States 
Government. Second, it clarifies that the Director of the CIA 
shall develop a process for such coordination, subject to the 
approval of the DNI. The DNI also may determine which 
activities will be subject to the process.

                 Oversight Findings and Recommendations

    With respect to clause 3(c)(1) of rule XIII of the Rules of 
the House of Representatives, the Committee held 10 hearings 
and briefings on the classified budgetary issues raised by H.R. 
2475. Testimony was taken from senior officials of the Central 
Intelligence Agency; the Community Management Staff; the 
Department of Defense; the Defense Intelligence Agency; the 
National Security Agency; the National Reconnaissance Office; 
the National Geospatial-Intelligence Agency; the Departments of 
the Army, Navy, and Air Force; the Department of State; the 
Department of Treasury; the Department of Energy; the Federal 
Bureau of Investigation; the Department of Homeland Security; 
and the U.S. Coast Guard. Such testimony related to the 
activities and plans of the Intelligence Community covered by 
the provisions and authorizations, both classified and 
unclassified, of the `Intelligence Authorization Act for Fiscal 
Year 2006.' The bill, as reported by the Committee, reflects 
conclusions reached by the Committee in light of this oversight 
activity.

                General Performance Goals and Objectives

    In accordance with Clause (3)(c) of House rule XIII, the 
Committee's performance goals and objectives are reflected in 
the descriptive portions of this report.

                   Constitutional Authority Statement

    The intelligence and intelligence-related activities of the 
United States government are carried out to support the 
national security interests of the United States, to support 
and assist the armed forces of the United States, and to 
support the President in the execution of the foreign policy of 
the United States.
    Article 1, section 8 of the Constitution of the United 
States provides, in pertinent part, that `Congress shall have 
power * * * to pay the debts and provide for the common defense 
and general welfare of the United States; * * *'; `to raise and 
support Armies, * * *' `to provide and maintain a Navy; * * *' 
and `to make all laws which shall be necessary and proper for 
carrying into execution * * * all other powers vested by this 
Constitution in the Government of the United States, or in any 
Department or Officer thereof.'

                       Unfunded Mandate Statement

    Section 423 of the Congressional Budget and Impoundment 
Control Act (as amended by Section 101(a)(2) of the Unfunded 
Mandates Reform Act, P.L. 104-4) requires a statement of 
whether the provisions of the reported bill include unfunded 
mandates. In compliance with this requirement, the Committee 
has received a letter from the Congressional Budget Office 
included herein.

     Budget Authority and Congressional Budget Office Cost Estimate

    With respect to the requirements of clause 3(c)(2) of rule 
XIII of the House of Representatives and section 308(a) of the 
Congressional Budget Act of 1974 and with respect to 
requirements of 3(c)(3) of rule XIII of the House of 
Representatives and section 402 of the Congressional Budget Act 
of 1974, the Committee has received the following cost estimate 
for H.R. 2475 from the Director of the Congressional Budget 
Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                      Washington, DC, May 31, 2005.
Hon. Peter Hoekstra,
Chairman, Permanent Select Committee on Intelligence, House of 
        Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 2475, the 
Intelligence Authorization Act for Fiscal Year 2006.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Jason 
Wheelock.
            Sincerely,
                                     Douglas Holtz-Eakin, Director.
    Enclosure.

H.R. 2475--Intelligence Authorization Act for Fiscal Year 2006

    H.R. 2475 would authorize appropriations for fiscal year 
2006 for intelligence activities of the U.S. government, the 
Intelligence Community Management Account, and the Central 
Intelligence Agency Retirement and Disability System (CIARDS).
    This estimate addresses only the unclassified portion of 
the bill. CBO cannot obtain the necessary information to 
estimate the costs for the entire bill because some parts are 
classified at a level above clearances held by CBO employees. 
For purposes of this estimate, CBO assumes that the bill will 
be enacted by October 1, 2005, and that the necessary amounts 
will be appropriated for fiscal year 2006. Estimated outlays 
are based on historical spending patterns. The costs of this 
legislation fall within budget function 050 (national defense).
    Section 104 would authorize the appropriation of $446 
million for the Intelligence Community Management Account, 
which provides the principal source of funding for the Office 
of the Director of National Intelligence and provides resources 
for coordination of programs, budget oversight, and management 
of the intelligence agencies. CBO estimates that implementing 
this provision would cost $268 million in 2006 and $442 million 
over the 2005-2010 period, assuming appropriation of the 
specified amounts.
    Section 201 would authorize the appropriation of $245 
million for CIARDS to cover retirement costs attributable to 
military service and various unfunded liabilities. The 
appropriation to CIARDS is considered mandatory, and the 
authorization under this bill would be the same as assumed in 
the CBO baseline. Thus, this estimate does not ascribe any 
additional cost to that provision. The bill would not affect 
revenues.
    H.R. 2475 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would not affect the budgets of state, local, or tribal 
governments.
    The CBO staff contact for this estimate is Jason Wheelock. 
This estimate was approved by Peter H. Fontaine, Deputy 
Assistant Director for Budget Analysis.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

NATIONAL SECURITY ACT OF 1947

           *       *       *       *       *       *       *



TITLE I--COORDINATION FOR NATIONAL SECURITY

           *       *       *       *       *       *       *



     RESPONSIBILITIES AND AUTHORITIES OF THE DIRECTOR OF NATIONAL 
                              INTELLIGENCE

  Sec. 102A. (a) * * *

           *       *       *       *       *       *       *

  (d) Role of Director of National Intelligence in Transfer and 
Reprogramming of Funds.--(1) * * *

           *       *       *       *       *       *       *

  (5)(A) * * *
  (B) A transfer or reprogramming may be made without regard to 
a limitation set forth in clause (iv) or (v) of subparagraph 
(A) if the transfer has the concurrence of the head of the 
department involved or the Director of the Central Intelligence 
Agency (in the case of the Central Intelligence Agency). The 
authority to provide such concurrence may only be delegated by 
the head of the department [or agency involved] involved or the 
Director of the Central Intelligence Agency (in the case of the 
Central Intelligence Agency) to the deputy of such officer.

           *       *       *       *       *       *       *

  (e) Transfer of Personnel.--(1)(A) In addition to any other 
authorities available under law for such purposes, in the first 
twelve months after establishment of a new national 
intelligence center, the Director of National Intelligence, 
with the approval of the Director of the Office of Management 
and Budget and in consultation with the congressional 
committees of jurisdiction referred to in subparagraph (B), may 
transfer not more than 100 personnel authorized for elements of 
the intelligence community to such center.
  (B) The Director of National Intelligence [shall promptly 
provide notice of any transfer of personnel made pursuant to 
this paragraph to--] may not transfer personnel under 
subparagraph (A) unless the Director has provided notice of any 
transfer of personnel to be made pursuant to this paragraph and 
received a response from--
          (i) the congressional intelligence committees;
          (ii) the Committees on Appropriations of the Senate 
        and the House of Representatives;
          (iii) in the case of the transfer of personnel to or 
        from the Department of Defense, the Committees on Armed 
        Services of the Senate and the House of 
        Representatives; and
          (iv) in the case of the transfer of personnel to or 
        from the Department of Justice, to the Committees on 
        the Judiciary of the Senate and the House of 
        Representatives.
  [(C) The Director shall include in any notice under 
subparagraph (B) an explanation of the nature of the transfer 
and how it satisfies the requirements of this subsection.]
  (C) The Director shall include in any notice under 
subparagraph (B)--
          (i) an explanation of the nature of the transfer and 
        how it satisfies the requirements of this subsection;
          (ii) the number of personnel transferred; and
          (iii) the individual skills and capabilities of the 
        personnel involved.

           *       *       *       *       *       *       *

  (k) Coordination With Foreign Governments.--(1) Under the 
direction of the President and in a manner consistent with 
section 207 of the Foreign Service Act of 1980 (22 U.S.C. 
3927), the Director of National Intelligence shall oversee the 
coordination of the relationships between elements of the 
intelligence community and the intelligence or security 
services of foreign governments or international organizations 
on all matters involving intelligence related to the national 
security or involving intelligence acquired through clandestine 
means.
  (2)(A) The Director may assign an individual to be a 
representative of the Director at a United States mission in a 
foreign country. Any such individual shall oversee and manage 
all intelligence and intelligence-related activities conducted 
in that country by personnel of any element of the intelligence 
community.
  (B)(i) Subparagraph (A) shall not be construed to supersede 
the authority of the Director of the Central Intelligence 
Agency described in clause (ii), such authority being subject 
to general oversight by the Director of National Intelligence 
under paragraph (1).
  (ii) The authority referred to in clause (i) is the authority 
under section 104A(f) to coordinate relationships between 
elements of the intelligence community and the intelligence or 
security services of foreign governments or international 
organizations generally and the authority under section 
104A(d)(3) to provide overall direction for and coordination of 
the collection of human intelligence outside the United States.

           *       *       *       *       *       *       *


                   DIRECTOR OF SCIENCE AND TECHNOLOGY

  Sec. 103E. (a) * * *

           *       *       *       *       *       *       *

  (c) Duties.--The Director of Science and Technology shall--
          (1) * * *

           *       *       *       *       *       *       *

          (4) assist the Director on the science and technology 
        elements of the budget of the Office of the Director of 
        National Intelligence; [and]
          (5) assist the Director in establishing goals for the 
        elements of the intelligence community to meet the 
        technology needs of the community; and
          [(5)] (6) perform other such duties as may be 
        prescribed by the Director of National Intelligence or 
        specified by law.
  (d) Director of National Intelligence Science and Technology 
Committee.--(1) * * *

           *       *       *       *       *       *       *

  (3) The Committee shall--
          (A) coordinate and prioritize advances in research 
        and development related to intelligence; and

           *       *       *       *       *       *       *

  (4) In carrying out paragraph (3)(A), the Committee shall 
identify basic, advanced, and applied research programs to be 
carried out by elements of the intelligence community.

           *       *       *       *       *       *       *

  (e) Goals for Technology Needs of the Intelligence 
Community.--In carrying out subsection (c)(5), the Director of 
Science and Technology shall--
          (1) perform systematic identification and assessment 
        of the most significant intelligence challenges that 
        require technical solutions; and
          (2) examine options to enhance the responsiveness of 
        research and design programs to meet the requirements 
        of the intelligence community for timely support.

           *       *       *       *       *       *       *


              DIRECTOR OF THE CENTRAL INTELLIGENCE AGENCY

  Sec. 104A. (a) * * *

           *       *       *       *       *       *       *

  (d) Responsibilities.--The Director of the Central 
Intelligence Agency shall--
          (1) * * *

           *       *       *       *       *       *       *

          (3) [provide overall direction for and coordination 
        of the collection of national intelligence outside the 
        United States through human sources by elements of the 
        intelligence community] subject to subsection (h), 
        provide overall direction for and coordination of the 
        collection of human intelligence outside the United 
        States by any department, agency, or element of the 
        United States Government authorized to undertake such 
        collection and, in coordination with other departments, 
        agencies, or elements of the United States Government 
        which are authorized to undertake such collection, 
        ensure that the most effective use is made of resources 
        and that appropriate account is taken of the risks to 
        the United States and those involved in such 
        collection; and

           *       *       *       *       *       *       *

  (h) Clarification of Roles of DNI and DCIA With Respect to 
Human Intelligence Collection.--(1) In carrying out subsection 
(d)(3), the Director of the Central Intelligence Agency shall 
develop a process for the coordination of the collection of 
human intelligence outside of the United States. Such process 
shall be subject to the approval of the Director of National 
Intelligence.
  (2) The Director of National Intelligence shall determine 
which human intelligence collection activities shall be subject 
to the process developed under paragraph (1).

           *       *       *       *       *       *       *


                            ADDITIONAL VIEWS

    The Intelligence Authorization bill for FY 2006 is the 
first authorization bill to be considered since the 
Intelligence Reform and Terrorism Prevention Act of 2004 (P.L. 
108-458) became law last December. The reforms undertaken last 
year, in the aftermath of two intelligence failures, created a 
Director of National Intelligence (DNI) and dramatically 
reshaped the Intelligence Community. This authorization bill 
will therefore help define the authorities, priorities and 
direction of the Director of National Intelligence (DNI) and 
the entire Intelligence Community.
    We strongly support many aspects of this bill, which 
provides the resources for the brave men and women of the 
Intelligence Community who stand on the front lines in defense 
of our country. We salute their courage and dedication.
    This year, the President sent to Congress a budget that 
again fell short in counterterrorism funding, requesting just 
40% of the community's counterterrorism requirements for FY 
2006. We are pleased the full Committee took the step in this 
bill to authorize 100% of the Intelligence Community's 
counterterrorism funding needs. This is in significant contrast 
to the FY 2005 Intelligence Authorization bill which funded 
only 26% of intelligence counterterrorism requirements.
    Fully funding counterterrorism represents bipartisanship 
and good policy. The terrorist threat is not a temporary 
emergency; it is going to be with us for the foreseeable 
future. It is vital that we fund operations in a way that 
allows our field officers to plan ahead.
    This legislation also encourages the Intelligence Community 
to recruit and clear qualified personnel with the language 
skills and ethnic background that will make it easier to 
understand--and penetrate--the hard targets. This bill urges 
the DNI to establish a multi-tier security clearance system to 
help patriot Americans with relatives in foreign countries 
obtain security clearances to work in the Intelligence 
Community. This provision is identical to H. Res. 173, which 
all nine (9) Democrats on the Committee introduced on March 17, 
2005.
    There are also important new investments in human 
intelligence and other intelligence activities that, if 
administered properly, will help us penetrate terrorist cells, 
proliferation networks, and secretive regimes where our 
intelligence has been deficient.
    Despite these positive attributes, the legislation reported 
to the House contains a few provisions with which we disagree--
one of which is so damaging to the authority of the DNI that it 
threatens to undermine the very reforms passed by Congress last 
year.
    Under Section 305 of this bill, congressional committees, 
including the House and Senate Armed Services Committees, are 
given a ``pocket veto'' of the proposed personnel transfers by 
the DNI. We oppose this provision.
    Under the Intelligence Reform and Terrorism Prevention Act 
enacted and signed into law by the President last year, the DNI 
is required to ``promptly provide notice of any transfer of 
personnel'' to congressional committees of jurisdiction. 
Section 305 would substantively alter this requirement to 
prohibit the DNI from transferring personnel to intelligence 
centers ``unless the Director has provided notice of any 
transfer of personnel * * * and received a response from'' the 
congressional committees of jurisdiction. Thus, ifa committee 
chairman wished to block the transfer, all he or she would have to do 
is withhold indefinitely a response.
    This provision effectively guts a careful bipartisan 
compromise struck by House and Senate--and supported by the 
Chairman of this Committee--in its consideration of the 
intelligence reform legislation last year. It waters down that 
transfer authority to the point where it is virtually 
eliminated.
    This provision is opposed by the DNI. When the identical 
provision was proposed as an amendment to the FY 2006 Defense 
Authorization bill at the May 18 markup, a spokesman for the 
DNI told the New York Times that Ambassador Negroponte's office 
was ``aware of the provisions being considered, and we would be 
opposed to any legislation that would restrict the DNI's 
authority.''
    During the intelligence authorization markup, the Ranking 
Member offered an amendment to strike Section 305. Several 
members of the Committee voiced strong support for this 
amendment. However, the amendment was defeated on a party-line 
vote. If this issue is not resolved in some other way in 
advance of floor action, it is our intent to offer our 
amendment on the floor--and we believe we will be successful. 
To the families of the victims of 9/11, who fought so hard for 
these reforms, we owe nothing less.
    On a separate matter, we expressed concern regarding the 
Committee's cuts to certain classified technical programs, 
which cannot be discussed in this unclassified report. (The 
classified transcript of the closed portion of the markup 
reflects our concerns.) As a general matter, we support the 
efforts to confront hard choices in technical programs. 
However, we think it is unwise to make sudden, drastic cuts to 
programs absent a more thorough technical review. These cuts 
could cause a gap in our capabilities and diminish the 
industrial base so critical to fielding the technology against 
current and future threats. We intend to work with the majority 
to review these cuts and arrive at a solution that protects our 
intelligence capabilities.

                               CONCLUSION

    This Committee's highest priority must be to ensure the 
success of the DNI and the thousands of professionals who work 
for the U.S. Intelligence Community. We support the robust 
funding for the Intelligence Community provided by this bill, 
and we especially support full-funding for counterterrorism. 
With a combination of resources and new authorities, we have 
placed the Intelligence Community on the right track to avoid 
the many mistakes that occurred in the past. This progress will 
be impeded if the DNI's authorities are undercut. For the sake 
of our nation's security, we cannot let this happen.
                                   Jane Harman.
                                   Alcee L. Hastings.
                                   Silvestre Reyes.
                                   Leonard L. Boswell.
                                   Bud Cramer.
                                   Anna G. Eshoo.
                                   Rush Holt.
                                   C.A. Dutch Ruppersberger.

                            ADDITIONAL VIEWS

    I concur with the minority's views regarding the need to 
remove Section 305 concerning a diminution of DNI transfer 
authorities and the support for full funding of 
counterterrorism. While I agree with much of what those views 
state concerning funding of systems, there exists some discreet 
differences in degree and proposed remedy. Similarly, comments 
that seem to indicate that all funds are otherwise being spent 
entirely appropriately seem overbroad and cannot be supported 
without clarification which is best left for any classified 
section of this report.
                                   John F. Tierney.

                                  
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